I am currently in negotiation with the owner of the small outdoor bootcamp I work for to purchase part of the business. I am looking to buy out the client list of the morning classes for which I teach. The owner has giving me a breakdown of what she thinks the classes are worth and is valuing the classes much higher than I would have thought. Revenue aside, she includes my current salary as the “owner comp add back” in the total discretionary earnings number since I am already teaching the classes and as the future owner the money will be going to me. I am having trouble grasping this as I still need to pay myself a salary and it seems like paying her for my income doesn’t make sense. Has anyone gone through anything similar or can provide some advice?
How many other people are interested in buying the business? And how likely is it that she will sell it to them instead of to you? And if she does, will the new buyer bring you along with the deal or do you lose your teaching position? If you don’t buy the business, does that mean you still have your teaching position and everything stays the same? What costs is she currently paying that you will have to take over – insurance, equipment, venue (some places like schools charge for you to use their outdoor space), permits.
All of these thoughts are worth considering, and could negotiate a price up, or down.
Negotiation is a game. I tend to negotiate hard, but also fairly. The best deals are done when both parties walk away happy and thinking they would do business again with that person in the future.